House Speaker Nancy Pelosi announced a new plan on Thursday to lower drug prices in the United States and — not surprisingly — the Democrats’ answer to the current health care crisis is … more government.
Pelosi’s new plan, which will likely be adopted by many Democrats hoping to challenge President Donald Trump in 2020, would allow Medicare to negotiate prices of the 250 costliest drugs, including insulin. Pharmaceutical companies that refuse to negotiate face penalties and companies that up prices beyond standard inflation would have to pay penalties to Medicare.
“The status quo on prescription drug prices is broken,” House Dems said in a summary of the plan, which has been in the works for months. “Prescription drug companies are charging Americans prices that are three, four, or even ten times higher than what they charge for the same drugs in other countries.”
Standing next to a pink sign reading, “Lower Drug Costs Now!” Pelosi held a press conference where she made it clear health care would be a big issue for Democrats going into 2020.
“When you travel the country, the issue of the cost of prescription drugs is one subject that can make grown men cry,” Pelosi said.
She later added, “We don’t want a political issue at the polls. We want a solution in the Congress.”
Current regulations prohibit the Department of Health and Human Services from negotiating drug prices on behalf of Medicare. Pelosi believes her plan will best help elderly citizens and young people with private insurance.
The plan is meant to lower the costs of drugs to what other nations play. The penalty for uncooperative companies will start at 65 percent of the gross sales of the specific drug being negotiated on. That penalty will then increase by 10 percent every quarter the company refuses to reach an agreement with the government on pricing. The negotiated prices would reportedly also be available to other insurance providers.
The plan would also limit the out-of-pocket cost to $2000 for Medicare beneficiaries.
“In this case, there is a monopoly and the government needs to intervene,” Gerard Anderson, professor of health policy and management at Johns Hopkins University, said to CNBC. “Setting the maximum price at an international standard and then negotiating is a sensible approach.”
The trouble with this thinking is that the entire reason health insurance has become a monopoly is because of government intervention. Republicans have long argued that health insurance companies should be held more to a free market standard. Monopolies have a much harder time existing in a completely free market where consumers have more choice.
Another proposal from the Senate Finance Committee would similarly bar drug companies from raising prices faster than inflation. This plan has also received pushback for its reliance on the federal government to step in.
Despite Democrats years ago screaming to the heavens that they solved health care issues with the disastrous — and government-friendly — Obamacare, health care remains a central issue for voters going into the 2020 presidential election.
Fox News released a poll on Wednesday that revealed that health care is the most important issue for voters. 10 percent of respondents said the issue would be a “deal-breaker” for them when deciding on a candidate to support.
As far as expanding programs like Medicare, 68 percent of respondents said they supported expansion as long as every citizen then had the choice of whether to join or not. 24 percent of respondents said they opposed Medicare expansion.
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